Oil Falls for First Day in Five as European Confidence Worsens

July 30 (Bloomberg) -- Oil declined in New York for the
first time in five days as European economic confidence
worsened, fanning concern that fuel consumption may slow.

West Texas Intermediate futures dropped as much as 0.8
percent, reversing an earlier gain of 0.9 percent. An index of
executive and consumer sentiment in euro area dropped to 87.9
this month from 89.9 in June, the European Commission said in
Brussels. That’s the lowest since September 2009. The euro
dropped as much as 0.8 percent against the dollar. Crude had
advanced on speculation that European policy makers will act to
resolve the region’s debt crisis.

“The stronger dollar is weighing on commodities today,”
said Eugen Weinberg, head of commodities research at Commerzbank
AG in Frankfurt.

Crude for September delivery fell as low as $89.40 a barrel
in electronic trading on the New York Mercantile Exchange, and
was at $89.55 as of 1:41 p.m. London time.

Brent oil for September settlement was at $105.76 a barrel,
down 71 cents on the London-based ICE Futures Europe exchange.
The European benchmark crude was at a $16.21 premium to New
York-traded West Texas Intermediate grade. The spread was $16.34
on July 27, the widest since May 22.

The European Central Bank’s Governing Council is scheduled
to meet Aug. 2 in Frankfurt and gauge the effect of its July
decision to cut the benchmark interest rate to a record low of
0.75 percent. The U.S. Federal Reserve’s Federal Open Market
Committee will consider the need for more stimulus at a two-day
meeting that ends Aug. 1.

ECB President Mario Draghi will meet U.S. Treasury
Secretary Timothy Geithner in Frankfurt today. Draghi is also
trying to persuade policy makers to agree on a multi-pronged
approach to reduce bond yields in countries such as Spain and
Italy, two central bank officials said July 27, asking not to be
identified because the talks are private.